allowance and 4 weeks of vacation per year.
Severance Terms. If we terminate Ms. DeMarco or Mr. Frank A. Del Rio’s employment without cause, provide notice that their agreements shall not be extended or further extended, or Ms. DeMarco or Mr. Frank A. Del Rio terminate their employment for good reason, they will be entitled to receive: (i) a severance payment equal to two times their base salary then in effect, payable in substantially equal installments over a period of 12 months, (ii) payment of a pro-rata portion of any annual bonus actually earned for the year of termination and (iii) reimbursement of premiums to continue medical and dental.
The foregoing description of Ms. DeMarco’s and Mr. Frank A. Del Rio’s employment agreements is qualified in its entirety by reference to the full text of the agreements, which are filed as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K and are incorporated by reference herein.
Transition and Release Agreements
In connection with their transitions to Special Advisor roles, each of Mr. Jason Montague and Mr. Howard Sherman entered into Transition and Release Agreements with subsidiaries of the Company on December 13, 2022 (the “Transition Agreements”). Under the terms of their Transition Agreements, Mr. Montague and Mr. Sherman will remain employees of the Company and will be responsible for providing guidance and assistance to the new Presidents of Oceania Cruises and Regent Seven Seas Cruises during the transition period. Pursuant to the terms of the Transition Agreements, from January 1, 2023 through December 31, 2024, as consideration for their continued employment as Special Advisors, Mr. Montague and Mr. Sherman will receive annual base salaries of $500,000, payment of a previously awarded cash retention bonus and an equity award in 2023. Mr. Montague and Mr. Sherman will be entitled to receive any annual bonus actually paid for 2022, but will not be entitled receive an annual bonus for 2023 or 2024 and will not be eligible for any additional equity award grants other than the grant described above. Mr. Montague and Mr. Sherman will also be entitled to continue to receive executive office cruise privileges during and after the term of their Transition Agreements.
The foregoing description of Mr. Montague’s and Mr. Howard Sherman’s Transition Agreements is qualified in its entirety by reference to the full text of the agreements, which are filed as Exhibit 10.3 and Exhibit 10.4 to this Current Report on Form 8-K and are incorporated by reference herein.
Item 7.01Regulation FD Disclosure.
The Company is undergoing a broad and ongoing effort to improve operating efficiencies, including cost minimization initiatives, to strengthen the foundation for sustained, profitable growth. As part of this initiative, on December 14, 2022, the Company carried out a workforce reduction and rightsizing to better align the Company’s workforce with its strategic priorities and prepare for its future growth, resulting in an approximately 9% reduction in current and planned shoreside roles.
Cautionary Statement Concerning Forward-Looking Statements
Some of the statements, estimates or projections contained in this report are “forward-looking statements” within the meaning of the U.S. federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this report, including, without limitation, those regarding our business strategy, financial position, results of operations, plans, prospects, actions taken or strategies being considered with respect to our liquidity position, valuation and appraisals of our assets and objectives of management for future operations (including those regarding expected fleet additions, our expectations regarding the impacts of the COVID-19 pandemic, Russia’s invasion of Ukraine and general macroeconomic conditions, our expectations regarding cruise voyage occupancy, the implementation of and effectiveness of our health and safety protocols, operational position, demand for voyages, plans or goals for our sustainability program and decarbonization efforts, our expectations for future cash flows and profitability, financing opportunities and extensions, and future cost mitigation and cash conservation efforts and efforts to reduce operating expenses and capital expenditures) are forward-looking statements. Many, but not all, of these statements can be found by looking for words like “expect,” “anticipate,” “goal,” “project,” “plan,” “believe,” “seek,” “will,” “may,” “forecast,” “estimate,” “intend,” “future” and similar words. Forward-looking statements do not guarantee future performance and may involve risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to the impact of: the spread of epidemics, pandemics and viral outbreaks, including the COVID-19 pandemic, and their effect on the ability or desire of people to travel (including on cruises), which is expected to continue to adversely impact our results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price; implementing precautions in coordination with regulators and global public health authorities to protect the health, safety and security of guests, crew and the communities we visit and to comply with regulatory restrictions related to the pandemic; our indebtedness and restrictions in the agreements governing our indebtedness that require us to maintain minimum levels of liquidity and be in compliance with maintenance covenants and otherwise limit our flexibility in operating our business, including the significant portion of assets that are collateral under these agreements; our ability to work with lenders and others or otherwise pursue options to defer, renegotiate, refinance or restructure our existing debt profile, near-term debt amortization, newbuild related payments and other obligations and to work with credit card processors to satisfy current or potential future demands for collateral on cash advanced from customers relating to future cruises; our need for additional financing or financing to optimize our balance sheet, which may not be available on favorable terms, or at all, and our outstanding exchangeable notes and any future financing which may be dilutive to
